Saturday, June 07, 2008

Technical Analysis On The S&P

Above is a weekly chart of SPY(S&P) along with slow stochastics and the on balance volume indicator.

Let's first start with the weekly bearish engulfment that took place 2 weeks ago. That was the first bearish sign that stocks would move lower. During that week the trendline was also broken confirming that a change of trend is taking place from up to down.

Now we see the stochastics have crossed and are on a sell signal. Notice how On balance volume was showing bearish divergence at the highs which was another warning sign that stocks were about to head lower.

Nothing works 100% of the time but experience has taught me that if I follow signals, I'll make money in the long run and my signals are all pointing down. I am bearish on stocks.


frank said...

Kevin- are you going to buy GLD on a break of 910?


moo said...

we got a Hindenburg Omen observation Friday, June 6th. What this means is we are now on the clock for a confirming observation. Should we get a second observation within the next 36 days, it means there is a much higher than normal probability that we will get a major stock market decline over the next 120 days, with a 25 percent shot at a full blown stock market crash. 120 days takes us into the dreaded September/October period.

Kevin said...

Not sure Frank...If I do I will post my entry on this blog.


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